0000950129-01-503784.txt : 20011119
0000950129-01-503784.hdr.sgml : 20011119
ACCESSION NUMBER: 0000950129-01-503784
CONFORMED SUBMISSION TYPE: 10-Q
PUBLIC DOCUMENT COUNT: 3
CONFORMED PERIOD OF REPORT: 20010930
FILED AS OF DATE: 20011106
FILER:
COMPANY DATA:
COMPANY CONFORMED NAME: STEWART INFORMATION SERVICES CORP
CENTRAL INDEX KEY: 0000094344
STANDARD INDUSTRIAL CLASSIFICATION: TITLE INSURANCE [6361]
IRS NUMBER: 741677330
STATE OF INCORPORATION: DE
FISCAL YEAR END: 1231
FILING VALUES:
FORM TYPE: 10-Q
SEC ACT: 1934 Act
SEC FILE NUMBER: 001-02658
FILM NUMBER: 1775736
BUSINESS ADDRESS:
STREET 1: 1980 POST OAK BLVD
CITY: HOUSTON
STATE: TX
ZIP: 77056
BUSINESS PHONE: 7136258100
MAIL ADDRESS:
STREET 1: 1980 POST OAK BLVD
CITY: HOUSTON
STATE: TX
ZIP: 77056
10-Q
1
h91852e10-q.txt
STEWART INFORMATION SERVICES CORPORATION-9/30/01
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
(Mark One)
[x] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 2001
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from _______________ to _______________
Commission file number 1-12688
STEWART INFORMATION SERVICES CORPORATION
------------------------------------------------------
(Exact name of registrant as specified in its charter)
Delaware 74-1677330
------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
1980 Post Oak Blvd., Houston TX 77056
------------------------------------------------------------
(Address of principal executive offices, including zip code)
(713) 625-8100
----------------------------------------------------
(Registrant's telephone number, including area code)
--------------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing requirements
for the past 90 days. Yes X No
--- ---
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of November 2, 2001.
Common 16,728,570
Class B Common 1,050,012
FORM 10-Q
QUARTERLY REPORT
Quarter Ended September 30, 2001
TABLE OF CONTENTS
Item No. Page
-------- ----
Part I
1. Financial Statements 1
2. Management's Discussion and Analysis of Financial
Condition and Results of Operations 6
3. Quantitative and Qualitative Disclosures About
Market Risk 9
Part II
1. Legal Proceedings 11
5. Other Information 11
6. Exhibits and Reports on Form 8-K 10
Signature 12
As used in this report, "we", "us", "our" and "Stewart" mean Stewart Information
Services Corporation and our subsidiaries unless the context indicates
otherwise.
STEWART INFORMATION SERVICES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS AND COMPREHENSIVE EARNINGS
FOR THE QUARTERS AND NINE MONTHS ENDED
SEPTEMBER 30, 2001 and 2000
THIRD QUARTER NINE MONTHS
------------------------- -------------------------
2001 2000 2001 2000
---------- ---------- ---------- ----------
($000 Omitted) ($000 Omitted)
Revenues
Title premiums, fees and other revenues 316,600 220,201 832,814 618,663
Real estate information services 17,021 14,019 48,912 39,246
Investment income 4,748 4,777 14,793 14,248
Investment gains (losses) - net 372 7 770 (280)
---------- ---------- ---------- ----------
338,741 239,004 897,289 671,877
Expenses
Amounts retained by agents 150,417 100,514 378,906 280,771
Employee costs 94,453 75,398 264,721 217,208
Other operating expenses 50,241 43,465 142,570 125,013
Title losses and related claims 13,243 9,340 34,755 27,447
Depreciation 5,171 5,172 14,668 14,444
Goodwill amortization 540 403 1,909 1,357
Interest 605 497 2,048 1,364
Minority interests 1,792 1,341 5,188 3,786
---------- ---------- ---------- ----------
316,462 236,130 844,765 671,390
---------- ---------- ---------- ----------
Earnings before taxes 22,279 2,874 52,524 487
Income taxes 9,276 1,116 21,010 209
---------- ---------- ---------- ----------
Net earnings 13,003 1,758 31,514 278
========== ========== ========== ==========
Average number of shares outstanding -
assuming dilution (000) 16,751 15,018 15,806 14,913
Earnings per share - basic .78 .12 2.01 .02
Earnings per share - diluted .78 .12 1.99 .02
========== ========== ========== ==========
Comprehensive earnings:
Net earnings 13,003 1,758 31,514 278
Changes in unrealized investment gains,
net of taxes of $1,418, $916, $1,988
and $1,129 2,633 1,701 3,693 2,097
---------- ---------- ---------- ----------
Comprehensive earnings 15,636 3,459 35,207 2,375
========== ========== ========== ==========
-1-
STEWART INFORMATION SERVICES CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
SEPTEMBER 30, 2001 AND DECEMBER 31, 2000
SEP 30 DEC 31
2001 2000
---------- ----------
($000 Omitted)
Assets
Cash and cash equivalents 59,762 35,728
Short-term investments 61,031 53,748
Investments - statutory reserve funds 235,410 206,150
Investments - other 85,405 52,242
Receivables 44,749 57,039
Property and equipment 45,235 45,459
Title plants 37,668 32,491
Goodwill 44,956 36,693
Deferred income taxes 3,370 7,352
Other 37,094 36,546
---------- ----------
654,680 563,448
========== ==========
Liabilities
Notes payable 16,614 32,543
Accounts payable and accrued liabilities 52,418 38,617
Estimated title losses 199,094 190,298
Minority interests 7,921 6,901
Contingent liabilities and commitments
Stockholders' equity
Common and Class B Common Stock and
additional paid-in capital 132,990 84,653
Retained earnings 241,574 210,060
Accumulated other comprehensive earnings 5,581 1,888
Treasury stock - 116,900 shares, at cost (1,512) (1,512)
---------- ----------
Total stockholders' equity ($21.30 per share at
September 30, 2001) 378,633 295,089
---------- ----------
654,680 563,448
========== ==========
-2-
STEWART INFORMATION SERVICES CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2001 AND 2000
2001 2000
---------- ----------
($000 Omitted)
Cash provided by operating activities (Note) 80,835 17,272
Investing activities:
Purchases of property and equipment and title plants - net (12,906) (16,446)
Proceeds from investments matured and sold 73,195 51,360
Purchases of investments (135,283) (48,863)
Increases in notes receivable (2,138) (2,795)
Collections on notes receivable 9,616 860
Cash paid for the acquisition of subsidiaries - net (7,057) (8,537)
---------- ----------
Cash used by investing activities (74,573) (24,421)
Financing activities:
Repurchases of common stock -- (1,512)
Distribution to minority interests (4,106) (3,568)
Proceeds from issuance of stock 44,727 --
Proceeds of notes payable 8,582 13,842
Payments on notes payable (31,431) (4,057)
---------- ----------
Cash provided by financing activities 17,772 4,705
---------- ----------
Increase (decrease) in cash and cash equivalents 24,034 (2,444)
========== ==========
NOTE: Reconciliation of net earnings to the above amounts -
Net earnings 31,514 278
Add (deduct):
Depreciation and amortization 16,577 15,801
Provision for title losses in excess of payments 8,033 1,164
Provision for uncollectible amounts - net (82) 38
Decrease in accounts receivable - net 5,477 4,218
Increase (decrease) in accounts payable and accrued
liabilities - net 13,445 (7,450)
Minority interest expense 5,188 3,786
Equity in net (earnings) loss of investees (1,619) (166)
Realized investment (gains) losses - net (770) 280
Stock bonuses 416 541
Decrease (increase) in other assets 1,079 (2,228)
Other - net 1,577 1,010
---------- ----------
Cash provided by operating activities 80,835 17,272
========== ==========
Supplemental information:
Assets acquired (purchase method)
Goodwill 10,133 7,284
Title plants 4,906 706
Other 3,021 5,501
Liabilities assumed (2,473) (16)
Common Stock issued (3,220) (4,938)
Debt issued to sellers (5,310) --
---------- ----------
Cash paid for acquisitions 7,057 8,537
========== ==========
-3-
STEWART INFORMATION SERVICES CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
Note 1: Interim Financial Statements
The financial information contained in this report for the three and nine month
periods ended September 30, 2001 and 2000, and as of September 30, 2001, is
unaudited. In the opinion of our management, all adjustments necessary for a
fair presentation of this information for all unaudited periods, consisting only
of normal recurring accruals, have been made. The results of operations for the
interim periods are not necessarily indicative of results for a full year.
Certain amounts in the 2000 condensed consolidated financial statements have
been reclassified for comparative purposes. Net earnings, as previously
reported, were not affected.
Note 2: Segment Information
Our two reportable segments are title and real estate information. Selected
financial information related to these segments follows:
Real estate
Title information Total
----- ----------- -----
($000 Omitted)
Revenues:
Three months ended
9/30/01 321,720 17,021 338,741
9/30/00 224,985 14,019 239,004
Nine months ended
9/30/01 848,377 48,912 897,289
9/30/00 632,631 39,246 671,877
Pretax earnings (losses):
Three months ended
9/30/01 20,194 2,085 22,279
9/30/00 3,945 (1,071) 2,874
Nine months ended
9/30/01 47,325 5,199 52,524
9/30/00 4,392 (3,905) 487
Identifiable assets:
9/30/01 612,429 42,251 654,680
12/31/00 525,045 38,403 563,448
Note 3: Earnings Per Share
Our basic earnings per share figures were calculated by dividing net earnings by
the weighted average number of shares of Common Stock and Class B Common Stock
outstanding during the reporting period. The only potentially dilutive effect on
earnings per share is related to our stock option plans.
In calculating the effect of the options and determining diluted earnings per
share, the average number of shares used in calculating basic earnings per share
was increased by 151,000 and 97,000 for the three month periods ended September
30, 2001 and 2000, respectively and 149,000 and 98,000 for the nine months ended
September 30, 2001 and 2000, respectively.
-4-
Note 4: Equity in Investees
The amount of earnings from equity method investments was $0.5 million and $0.3
million for the three month periods ended September 30, 2001 and 2000,
respectively and $1.6 million and $0.2 million for the nine month periods ended
September 30, 2001 and 2000, respectively. These amounts are included in "title
premiums, fees and other revenues" in the condensed consolidated statements of
earnings and comprehensive earnings.
Note 5: Changes in Accounting Principles
In July 2001, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Accounting Standards ("SFAS") No. 141 "Business Combinations". This
statement is effective for all business combinations initiated after June 30,
2001 and requires the purchase method of accounting be used for all business
combinations. The adoption of SFAS 141 will not have a material effect on our
consolidated financial position or results of operations.
In July 2001, the FASB issued SFAS No. 142 "Goodwill and Other Intangible
Assets". This statement is effective for fiscal years beginning after December
15, 2001 and provides that goodwill and certain intangible assets remain on the
balance sheet and not be amortized. Instead, goodwill will be tested for
impairment annually and goodwill determined to be impaired will be expensed to
current operations. Goodwill amortization was $1.9 million and $1.4 million for
the nine month periods ended September 30, 2001 and 2000, respectively. Goodwill
amortization was $1.8 million for the year ended December 31, 2000. We have not
fully determined the impact that this statement will have on our consolidated
financial position or results of operations.
We do not invest in hedging or derivative instruments nor do we intend to do so
in the future. Accordingly, SFAS 133, "Accounting for Derivative Instruments and
Hedging Activities" (as amended), which became effective January 1, 2001 for us,
has no impact on our condensed consolidated financial statements.
-5-
Item 2: Management's Discussion and Analysis of Financial Condition and Results
of Operations
GENERAL
Our primary business is title insurance. We issue policies on homes and
other real property located in all 50 states, the District of Columbia and
several foreign countries through more than 5,700 issuing locations. We also
sell electronically delivered real estate services and information, as well as
mapping products and geographic information systems, to domestic and foreign
governments and private entities.
Our business has two main segments: title and real estate information,
or REI. These segments are closely related due to the nature of their operations
and common customers. The segments provide services throughout the United States
through a network of offices, including both direct operations and agents.
Although we conduct operations in several international markets, at current
levels they are generally immaterial with respect to our consolidated financial
results.
RESULTS OF OPERATIONS
Generally, the principal factors that contribute to increases in our
operating revenues for our title and REI segments include:
o declining mortgage interest rates, which usually increase home sales
and refinancing transactions;
o rising home prices;
o higher premium rates;
o increased market share;
o additional revenues from our new offices and
o increased revenues from our commercial transactions.
Our large commercial transactions, although relatively few in number, typically
yield higher premiums.
NINE MONTHS ENDED SEPTEMBER 30, 2001 COMPARED TO NINE MONTHS ENDED SEPTEMBER 30,
2000
General. According to published industry data, interest rates for 30-year
fixed mortgages, excluding points, for the nine months ended September 30, 2001
averaged 7.0% as compared to 8.2% for the same period in 2000.
Because of a favorable mortgage interest rate environment, real estate
activity in the first nine months of 2001 was very strong. Refinancing
transactions increased significantly. The ratio of refinancings to total loan
applications was 51.8% for the first nine months of 2001 compared to 16.6% for
the same period in 2000. Existing home sales increased 2.6% in the first nine
months of 2001 over the same period in 2000.
Title revenues. Our revenues from premiums, fees and other revenues
increased 34.6% in the first nine months of 2001 over the first nine months of
2000.
Revenues from direct business increased 37.0% to $371.1 million. The number
of direct closings we handled increased 47.6% in the first nine months of 2001
over the same period in 2000. Direct closings relate only to files that our
underwriters and subsidiaries close and do not include closings by agents. The
average revenue per direct closing decreased 7.5% in the first nine months of
2001 compared to the same period in 2000 because of the significant increase
during that period in the number of refinancings with lower premiums. There were
no major revenue rate changes in the first nine months of 2001 or 2000.
Premiums from independent agents increased 32.7% to $461.8 million for the
nine months ended September 30, 2001 compared to the same period in 2000. The
increase resulted primarily from increased refinancings and regular transactions
handled by agents nationwide. The largest increases were in California and
Florida.
REI revenues. Real estate information revenues were $48.9 million for the
nine months ended September 30, 2001 and $39.2 million for the nine months ended
September 30, 2000. The increase resulted primarily from providing an increased
number of post-closing services, flood determinations, Section 1031 tax-deferred
exchanges and electronic mortgage documents resulting from the increase in real
estate transactions.
-6-
Investments. Investment income increased 3.8% in the first nine months of
2001 compared to the first nine months of 2000 primarily because of an increase
in average balances. Investment gains during this period were realized as part
of the ongoing management of the investment portfolio for the purpose of
improving performance.
Agent retention. The amounts retained by agents, as a percentage of
premiums from agents, were 82.1% and 80.7% in the first nine months of 2001 and
2000, respectively. Amounts retained by title agents are based on contracts
between agents and our title insurance underwriters. The percentage that amounts
retained by agents bears to agent revenues may vary from year to year because of
the geographical mix of agent operations and the volume of title revenues.
Employee costs. Employee costs for the combined business segments increased
21.9% for the nine months ended September 30, 2001 compared to the same period
in 2000. The number of persons we employed at September 30, 2001 and September
30, 2000 was approximately 6,600 and 5,700, respectively. The increase was
primarily the result of acquisitions of new offices.
In the REI segment, employee costs increased in the first nine months of
2001 over 2000 primarily due to a continuing shift in focus to providing more
post-closing services to lenders. These services are significantly more labor
intensive.
Other operating expenses. Other operating expenses for the combined
business segments increased 14.0% in the first nine months of 2001. The increase
in other operating expenses for the combined business segments during this
period resulted from new offices, search fees and rent. These costs were offset
partially by reductions in products purchased for resale.
Other operating expenses also include title plant expenses, travel,
delivery costs, premium taxes, business promotion, REI expenses, telephone,
supplies and policy forms. Most of these expenses follow, to varying degrees,
the changes in transaction volume and revenues.
Our labor and certain other operating costs are sensitive to inflation. To
the extent inflation causes increases in the prices of homes and other real
estate, premium revenues also increase. Premiums are determined in part by the
insured values of the transactions we handle.
Title losses. For the nine months ended September 30, provisions for title
losses, as a percentage of title premiums, fees and other revenues, were 4.2% in
2001 and 4.4% in 2000. The continued improvement in industry trends in claims
and increases in refinancing transactions, which result in lower loss exposure,
have led to lower loss ratios in recent years.
Income taxes. The provision for federal and state income taxes represented
effective tax rates of 40.0% and 42.9% in the first nine months of 2001 and
2000, respectively.
THREE MONTHS ENDED SEPTEMBER 30, 2001 COMPARED TO THREE MONTHS ENDED SEPTEMBER
30, 2000
General. According to published industry data, interest rates for 30-year
fixed mortgages, excluding points, for the three months ended September 30, 2001
averaged 7.0% as compared to 8.0% for the same period in 2000.
Because of a favorable mortgage interest rate environment, real estate
activity in the third quarter of 2001 was very strong. Refinancing transactions
increased significantly. The ratio of refinancings to total loan applications
was 51.2% for the third quarter of 2001 compared to 17.4% for the third quarter
of 2000. Existing home sales increased 2.7% in the third quarter of 2001 over
the same period in 2000.
Title revenues. Our revenues from premiums, fees and other revenues
increased 43.8% in the third quarter of 2001 over the same period in 2000.
Revenues from direct business increased 40.7% to $134.6 million. The number
of direct closings we handled increased 48.2% in the third quarter of 2001.
Direct closings relate only to files that our underwriters and subsidiaries
close and do not include closings by agents. The average revenue per direct
closing decreased 4.8% in the third quarter of 2001 compared to the same period
in 2000 because of the significant increase during that period in the number of
refinancings with lower premiums. There were no major revenue rate changes in
the third quarter of 2001 or 2000.
Premiums from independent agents increased 46.1% to $182.0 million for the
third quarter of 2001 compared to the same period in 2000. The increase resulted
primarily from increased refinancings and regular transactions handled by agents
nationwide. The largest increases were in California, Florida and Pennsylvania.
-7-
REI revenues. Real estate information revenues were $17.0 million for the
third quarter of 2001 and $14.0 million for the third quarter of 2000. The
increase resulted primarily from providing an increased number of post-closing
services, flood determinations, Section 1031 tax-deferred exchanges and
electronic mortgage documents resulting from the increase in real estate
transactions.
Investments. Investment income decreased slightly in the third quarter of
2001 compared to the third quarter of 2000. The increase in the average balances
invested was offset by the decrease in yields. Investment gains during this
period were realized as part of the ongoing management of the investment
portfolio for the purpose of improving performance.
Agent retention. The amounts retained by agents, as a percentage of
premiums from agents, were 82.6% and 80.7% in the third quarters of 2001 and
2000, respectively. Amounts retained by title agents are based on contracts
between agents and our title insurance underwriters. The percentage that amounts
retained by agents bears to agent revenues may vary from year to year because of
the geographical mix of agent operations and the volume of title revenues.
Employee costs. Employee costs for the combined business segments increased
25.3% in the third quarter of 2001 compared to the same period in 2000. The
number of persons we employed at September 30, 2001 and September 30, 2000 was
approximately 6,600 and 5,700, respectively. The increase was primarily the
result of acquisitions of new offices.
In the REI segment, employee costs increased in the third quarter of 2001
over 2000 primarily due to a continuing shift in focus to providing more
post-closing services to lenders. These services are significantly more labor
intensive.
Other operating expenses. Other operating expenses for the combined
business segments increased 15.6% in the third quarter of 2001. The increase in
other operating expenses for the combined business segments during this period
resulted from new offices, premium taxes and search fees.
Other operating expenses also include title plant expenses, travel,
delivery costs, rent, business promotion, REI expenses, telephone, supplies and
policy forms. Most of these expenses follow, to varying degrees, the changes in
transaction volume and revenues.
Our labor and certain other operating costs are sensitive to inflation. To
the extent inflation causes increases in the prices of homes and other real
estate, premium revenues also increase. Premiums are determined in part by the
insured values of the transactions we handle.
Title losses. For the third quarter, provisions for title losses, as a
percentage of title premiums, fees and other revenues, were 4.2% in 2001 and
2000. The continued improvement in industry trends in claims and increases in
refinancing transactions, which result in lower loss exposure, have led to lower
loss ratios in recent years.
Income taxes. The provision for federal and state income taxes represented
effective tax rates of 41.6% and 38.8% in the third quarters of 2001 and 2000,
respectively.
LIQUIDITY AND CAPITAL RESOURCES
During the first nine months of 2001, we financed a portion of the purchase
price of two acquisitions through the issuance of $3.2 million of our common
stock. Acquisitions during the first nine months of 2001 resulted in additions
to our goodwill of $10.1 million.
We filed a registration statement with the Securities and Exchange Commission to
sell from time to time up to $75 million of common stock. The registration
statement was filed on March 30, 2001 and became effective on June 26, 2001. We
sold 2.5 million shares at $19 per share in August, 2001, resulting in net
proceeds of $44.6 million.
Internally generated cash flow has been the primary source of financing for
additions to property and equipment, expanding operations and other
requirements. This source may be supplemented by bank borrowings.
A substantial majority of consolidated cash and investments is held by Stewart
Title Guaranty Company and its subsidiaries. Cash transfers among Stewart Title
Guaranty Company and its subsidiaries and us are subject to certain legal
restrictions. See Notes 3 and 4 to our consolidated financial statements
included in our Annual Report on Form 10-K for the year ended December 31, 2000.
-8-
Our liquidity, excluding Stewart Title Guaranty Company and its subsidiaries,
comprised cash and investments aggregating $26.7 million and short-term
liabilities of $1.0 million at September 30, 2001. We know of no commitments or
uncertainties that are likely to materially affect our ability, or our
subsidiaries' ability, to fund cash needs.
We consider our capital resources, represented primarily by notes payable of
$16.6 million and stockholders' equity of $378.6 million at September 30, 2001,
to be adequate.
FORWARD LOOKING STATEMENTS
All statements included in this report, other than statements of historical
facts, which address activities, events or developments that the we expect or
anticipates will or may occur in the future are forward-looking statements. Such
forward-looking statements are subject to risks and uncertainties including,
among other things, changes in mortgage interest rates, employment levels,
actions of competitors, changes in real estate markets, general economic
conditions and legislation (primarily legislation related to insurance) and
other risks and uncertainties discussed in our filings with the Securities and
Exchange Commission.
Item 3: Quantitative and Qualitative Disclosures About Market Risk
There have been no material changes in our investment strategies, types of
financial instruments held or the risks associated with such instruments which
would materially alter the market risk disclosures made in our Annual Statement
on Form 10-K for the year ended December 31, 2000.
-9-
PART II
Page
----
Item 1. Legal Proceedings 11
Item 5. Other Information 11
Item 6. Exhibits and Reports on Form 8-K
(a) Index to exhibits
(b) There were no reports on Form 8-K filed during the
quarter ended September 30, 2001.
-10-
ITEM 1. LEGAL PROCEEDINGS
We are a party to a number of lawsuits incurred in connection with our
business, most of which are of a routine nature involving disputed policy
claims. In many of these suits, the plaintiff seeks exemplary or treble damages
in excess of policy limits based on the alleged malfeasance of an issuing agent.
We do not expect that any of these proceedings will have a material adverse
effect on our consolidated financial condition.
ITEM 5. OTHER INFORMATION
We paid regular quarterly cash dividends on our common stock from 1972
through 1999. During 1999, our Board of Directors approved a plan to repurchase
up to 5 percent (680,000 shares) of our outstanding common stock. Our Board also
decided to discontinue our regular quarterly dividend in favor of returning
those and additional funds to stockholders' equity through the stock repurchase
plan. Under this plan, we repurchased 116,900 shares of common stock during
2000. We did not repurchase any shares of our common stock in the first nine
months of 2001.
-11-
SIGNATURE
Pursuant to the requirements of the Securities and Exchange Act of 1934, we have
duly caused this report to be signed on our behalf by the undersigned thereunto
duly authorized.
Stewart Information Services Corporation
----------------------------------------
(Registrant)
November 6, 2001
----------------
Date
/s/ MAX CRISP
-----------------------------------------------
Max Crisp
(Vice President-Finance, Secretary-Treasurer,
Director and Principal Financial and
Accounting Officer)
-12-
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
------- -----------
4. - Rights of Common and Class B Common Stockholders
99.1 - Details of investments
EX-4
3
h91852ex4.txt
RIGHTS OF COMMON & CLASS B COMMON STOCKHOLDERS
EXHIBIT 4
STEWART INFORMATION SERVICES CORPORATION
RIGHTS OF COMMON AND CLASS B COMMON STOCKHOLDERS
SEPTEMBER 30, 2001
Common and Class B Common stockholders have the same rights, except (1) no
cash dividend may be paid on Class B Common Stock and (2) the two classes of
stock are voted separately in electing directors. A provision in the by-laws
requires an affirmative vote of at least two-thirds of the directors to approve
any proposal which may come before the directors. This by-law provision cannot
be changed without a majority vote of each class of stock.
Common stockholders, with cumulative voting rights, may elect five of the
nine directors. Class B Common stockholders may, with no cumulative voting
rights, elect four directors, if 1,050,000 or more shares of Class B Common
stock are outstanding; three directors, if between 600,000 and 1,050,000 shares
of Class B Common Stock are outstanding; if less than 600,000 shares of Class B
Common Stock are outstanding, the Common Stock and the Class B Common Stock
shall be voted as a single class upon all matters, with the right to cumulate
votes for the election of directors.
No change in the Certificate of Incorporation which would affect the Common
Stock and the Class B Common Stock unequally shall be made without the
affirmative vote of at least a majority of the outstanding shares of each class,
voting as a class.
Class B Common Stock may, at any time, be converted by its holders into
Common Stock on a share-for-share basis. Such conversion is mandatory on any
transfer to a person not a lineal descendant (or spouse, trustee, etc. of such
descendant) of William H. Stewart.
EX-99.1
4
h91852ex99-1.txt
DETAILS OF INVESTMENTS
Exhibit 99.1
STEWART INFORMATION SERVICES CORPORATION
DETAILS OF INVESTMENTS
SEPTEMBER 30, 2001 AND DECEMBER 31, 2000
SEP 30 DEC 31
2001 2000
--------- --------
($000 Omitted)
Investments, at market, partially restricted:
Short-term investments 61,031 53,748
U. S. Treasury and agency obligations 29,255 22,661
Municipal bonds 143,225 134,894
Mortgage-backed securities 24,159 16,047
Corporate bonds 114,303 78,683
Equity securities 9,873 6,107
--------- --------
TOTAL INVESTMENTS 381,846 312,140
========= ========
NOTE: The total appears as the sum of three amounts on the condensed
consolidated balance sheets presented on page 2: (1) `short-term investments',
(2) `investments - statutory reserve funds' and (3) `investments - other'.